Since the hype around artificial intelligence (AI) began, investors have been surprised by the incredible price performance of the “Magnificent Seven.” The name (German: the “magnificent seven”) stands for the American technology giants Alphabet, Amazon, Apple, Meta.microsoftNvidia and Tesla. The price increase of individual securities was between 50 and 240 percent in 2023.
Together, America's AI elite contributed about 60 percent of the gains to the U.S. S&P 500 stock index, which rose by more than a fifth in value last year.
Tips for beginners: Europe's top values
It is only annoying for those who did not jump on the bandwagon in time or, on the contrary, withdrew their profits from the stock market too early and are now hesitant to climb again to a higher level. The conclusion of the study: there are eleven best games in Europe.
the best of europe
Analysts at Wall Street bank Goldman Sachs analyzed the EU in 2020 and compiled a selection of the largest companies by market value. Four years later, the group represents a quarter of the Stoxx 600 stock index. Its name: “Granolas” – formed from the first letters of the following eleven stocks: GSK (formerly Glaxosmithkline), Roche, ASML, Nestlé, Novartis, Novo Nordisk, L'Oreal, LVMH, AstraZeneca, SAP and Sanofi.
The triple kick: Not only can the European team keep pace with the Magnificent Seven's price increase over a three-year period. The fact that their prices fluctuate much less also allows investors to sleep better. Furthermore, despite their rise, granolas are comparatively cheaper.
FOCUS MONEY presents the top eleven stocks under control (see below).
More profitability – less risk
No matter how different the industry mix is on both sides, the performance data is more or less the same.
Granolas also contribute 60 percent of the price increases in the European Stoxx 600 index. And: the profitability is in no way inferior to the performance of the magnificent seven. Compared to the beginning of 2021, the increase is 63 percent.
The factors that most influenced the prices were the low interest rate policy after Corona, the good reporting season and positive surprises, also from stocks such as Novo Nordisk (fat injection), SAP (strong business in the cloud) and Dutch semiconductor manufacturer ASML (full order). pipeline).
Another plus point: According to Goldman's analysis, the volatility (range of fluctuations) of granola prices has been significantly lower since 2018. Less price ups and downs also means: less pulse. Adjusted for risk, granola actually performs better.
Less risk is also sought in an environment that can change rapidly if market volatility becomes a toy of the Ukraine war and the Middle East conflict and stock markets already have their eyes on the election results in Europe and the United States. Joined.
It also lowers blood pressure: the most diverse mix of countries and industries in the European basket (healthcare, technology, consumer staples and luxury goods) compared to seven US-based tech rivals.
Unbeatably high payouts
Even if the US basket offers the worst price/risk ratio: Big Tech's AI push promises stimulating returns. Nowhere else in the economy is the potential for growth greater.
Europe's best, on the other hand, earn points with a combination of growth and strength. Strong balance sheets, strong profit growth, high and stable margins, deep moats (i.e. a strong competitive position) and generous distributions ensure top returns for many years to come.
Growing dividends
The conclusion is that Granolas' distribution performance is two percentage points higher than that of American technology companies. Due to the stable earnings situation, dividend payments are likely to continue rising in the long term.
The eleven European champions: